SEBI has come up with a proposal for developing a service platform known as MITRA – Mutual Fund Investment Tracing and Retrieval Assistant. This platform can help investors track the unclaimed and inactive mutual fund folios.
How will MITRA work?
The platform will be developed by RTAs, which will help the investors with an industry-wide searchable database. This database will contain all the inactive folios and unclaimed mutual fund folios information, which investors can search easily and identify any investments made by them or others, which have been overlooked for a long time and to which they are rightful legal claimants.
The mutual fund folios will be categorized as inactive when there have been no financial or non-financial transactions in the folio led by the investor in the past ten years, however, there is a unit balance in the folio remaining. It can be investors of an open-ended scheme when they have remained invested for years but did not make any new investments for a prolonged period, at least ten years, and did not even redeem the mutual fund investments or may have lost track of the investments.
Now these inactive folios can be claimed on the basis of KYC done by the investors. If any investor is aware of his or her investments, which are listed on the platform, they need not worry, as there won’t be any consequences on those investments because they have kept track of their mutual fund investments.
Two Qualified RTAs, Computer Age Management Services Ltd. (CAMS) and KFIN Technologies Ltd., which will act as AMCs’ agents, will host this platform MITRA. Investors can access the platform using links available on the MF Central website, AMFI, AMCs, both the Qualified RTAs’ (QRTAs) websites and SEBI.
These QRTAs together will handle compliance and ensure safety and security, maintain regulations, and take care of the cybersecurity and system audits. It is also QRTAs duty to make sure that the MITRA platform adheres to the Business Community Plan (BCP) of SEBI and Disaster Recovery guidelines, which are specified for Market Infrastructure Institutions.
Why SEBI is introducing MITRA?
The notion behind proposing the development of the MITRA platform by SEBI is to encourage mutual fund investors to perform their KYC as per the present guidelines of SEBI and AMFI. This in turn will reduce the number of non-KYC-compliant mutual fund folios, which again help in reducing the number of unclaimed mutual funds investments. If the investors have to claim their investments, then they have to complete their KYCs and this way the KYC compliance will increase while the unclaimed mutual fund folios will decrease. Therefore, it’s a win-win situation for both the investors and the market watchdog.
Source: TheEconomicsTimes
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